London midday: Stocks down but off lows, oil surges on Trump speech

(Sharecast News) - London stocks were off earlier lows but still in the red by midday on Thursday as oil prices shot up after Donald Trump said in his first national address since the start of the war that the US would hit Iran "extremely hard" in the coming weeks.

The FTSE 100 was down 0.2% at 10,344.63. At the same time, Brent crude was up 8% at $109.27 a barrel, while West Texas Intermediate was 8.4% higher at $108.56.

In his speech, which lasted just under 20 minutes, the US President said the war with Iran was "nearing completion" but that the US would hit the country "extremely hard" over the next two to three weeks.

"We are on track to complete all of America's military objectives shortly, very shortly," he said.

Trump said negotiations between the US and Iran are "ongoing". However, if no deal is struck, the US will "hit each and every one of their electric generating plants very hard, and probably simultaneously," he said.

The US president also urged countries that get their oil through the Strait of Hormuz to "build up some delayed courage" and get involved to ensure it reopens.

"The United States imports almost no oil through the Hormuz Strait and won't be taking any in the future. We don't need it," he said. "We haven't needed it, and we don't need it."

Trump said the US would be "helpful" but that other countries should take the lead in protecting the oil "that they so desperately depend on".

Susannah Streeter, chief investment strategist at Wealth Club, said: "High hopes have been replaced by fresh frissons of fear about the duration of the war with Iran after President Trump's bellicose speech, which gave no indication the conflict was very close to ending. Instead, the military looks set to intensify attacks, which is likely to provoke retaliatory strikes by Iran and risks destabilising the region further.

"The big concern will be about further damage to energy facilities across the Gulf. The repair work is already likely to take years, and further destruction is likely to keep oil and gas prices elevated for even longer. A barrel of Brent crude has jumped sharply, reflecting these worries, and is trading back up at $107 a barrel.

"European and UK gas futures have also jumped by more than 5% and are set to stay highly volatile. Around a fifth of global LNG supplies are usually transported through the Strait of Hormuz, but it remains largely impassable, and it's becoming clear that there is going to be no easy exit from this war, with a lack of planning increasingly evident."

In equity markets, precious metals miner Fresnillo and gold miner Hochschild slumped as gold prices retreated.

Lloyds Banking Group edged lower after saying it would with its �1.95bn compensation provision for the motor finance miss-selling scandal after assessing the regulator's final ruling. However, the lender warned there was still a number of uncertainties, including response rates, operational costs and any litigation.

"The ultimate outcome may also differ dependent upon potential actions by various parties, including legal proceedings and complaints. The group remains committed to ensuring customers receive appropriate and timely redress," it added.

The banking sector more broadly was under the cosh as sentiment soured, with Barclays and HSBC weaker.

Airlines flew lower amid concerns about fuel costs, with BA owner IAG, easyJet and Wizz all down.

On the upside, BP and Shell gushed higher amid firmer oil prices, while defensives British American Tobacco and Imperial Brands were among the gainers.

B&M European Value Retail shot up after an initiation at 'buy' by Kepler Cheuvreux.

Elsewhere, energy firm SSE was little changed after a trading update.

Market Movers

FTSE 100 (UKX) 10,344.63 -0.19%

FTSE 250 (MCX) 21,489.10 -0.92%

techMARK (TASX) 5,720.08 -0.35%

FTSE 100 - Risers

BP (BP.) 602.00p 4.50%

Shell (SHEL) 3,556.00p 3.28%

Centrica (CNA) 215.80p 1.79%

British American Tobacco (BATS) 4,384.00p 1.65%

Coca-Cola Europacific Partners (DI) (CCEP) 6,980.00p 1.45%

Tesco (TSCO) 479.80p 1.35%

Imperial Brands (IMB) 3,069.00p 1.22%

Marks & Spencer Group (MKS) 353.40p 1.12%

Whitbread (WTB) 2,365.00p 1.02%

National Grid (NG.) 1,307.00p 1.00%

FTSE 100 - Fallers

Fresnillo (FRES) 3,344.00p -4.35%

Barratt Redrow (BTRW) 252.60p -3.91%

St James's Place (STJ) 1,199.00p -3.23%

Anglo American (AAL) 3,235.00p -3.20%

Compass Group 11 (CPG) 28.59p -3.18%

IMI (IMI) 2,550.00p -2.89%

Pershing Square Holdings Ltd NPV (PSH) 3,954.00p -2.75%

Lion Finance Group (BGEO) 9,450.00p -2.58%

CRH (CDI) (CRH) 7,852.00p -2.39%

Rolls-Royce Holdings (RR.) 1,177.00p -2.36%

FTSE 250 - Risers

B&M European Value Retail (BME) 182.50p 5.19%

Ithaca Energy (ITH) 254.50p 3.88%

Diversified Energy Company (DI) (DEC) 1,300.00p 3.83%

GCP Infrastructure Investments Ltd (GCP) 74.00p 2.92%

The Renewables Infrastructure Group Limited (TRIG) 66.10p 2.64%

Raspberry PI Holdings (RPI) 496.70p 1.99%

Harbour Energy (HBR) 293.20p 1.88%

Baillie Gifford US Growth Trust (USA) 295.50p 1.55%

Genus (GNS) 2,485.00p 1.43%

Hilton Food Group (HFG) 526.00p 1.15%

FTSE 250 - Fallers

Pan African Resources (PAF) 144.00p -6.38%

Hochschild Mining (HOC) 601.50p -5.79%

OSB Group (OSB) 512.00p -5.19%

Taylor Wimpey (TW.) 84.16p -4.95%

Oxford Nanopore Technologies (ONT) 111.70p -4.94%

Wizz Air Holdings (WIZZ) 863.00p -4.38%

Endeavour Mining (EDV) 4,512.00p -4.32%

Domino's Pizza Group (DOM) 170.40p -4.11%

Marshalls (MSLH) 140.40p -3.83%

Ibstock (IBST) 102.20p -3.58%